How To Convert 401k To Gold


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It’s possible and fairly easy to literally learn how to convert 401k to gold. Well, to be specific, the conversion is usually into an IRA that allows investments in certain metals. Be that as it may, the net result is still that funds in the 401(k) end up being used to buy gold.

This is made possible by making use of a procedure known as a rollover. It’s a term that applies to the transfer of funds between qualified retirement accounts without losing the tax advantages. If the funds are simply withdrawn and used for investments into a metal, there would be additional tax liabilities and loss of the employer’s share of contributions to the account.

In this case, the procedure is to open a new self-directed IRA and then request a rollover of funds into it from the existing 401(k). It may be a good idea at this point to learn a bit more about these IRAs. They’re just like any other individual retirement account, offering the same tax deferral advantages and requiring a custodian to handle the administration.

The difference is in the freedom to choose the type of investment. The account holder may choose to invest in a broad array of non-traditional investments such as real estate, tax liens, notes, precious metals and even direct investments into a business in return for an equity stake. The options in a 401(k) or even a traditional IRA are far more limited, and it’s virtually impossible to look beyond financial securities such as stocks, bonds and mutual funds.

Obviously, it’s not that simple in reality because there are very clear rules and regulations that need to be followed. For instance, those who plan to buy gold bullion including bars and coins are severely limited by quality requirements. This rules out most of the yellow metal that’s already in circulation in the commercial market.

Bars need to have a purity of 24 karats and fineness of 0.995 or more. Coins must be 24 karat pure with 0.999 or more in terms of fineness. An exception to the rule is the 22 karat U. S. Gold Eagle. Other coins that are acceptable investments for a self-directed IRA include the Canadian Maple Leaf and the Australian Nuggets and Kangaroos, to name a few.

There’s also the matter of choosing the right custodian, since many have their own set of rules. Some allow account holders to take physical possession of coins (bars must be held in vaults). Others will hold the bullion themselves, and pay the going market price of the metal when distributions are taken from the account.

It’s very important to choose the right custodian depending on the account holder’s familiarity with precious metals and knowledge of trading in the global markets. Some custodians also make it very easy for customers to convert 401k to gold. They will handle everything, including the rollover requests to the employer and the subsequent purchase and safekeeping of the metal. These firms will charge an administrative fee and impose charges for the storage and security. Others allow customers to find the seller, initiate transactions, and even take possession of the gold.

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Kelly Lyalls

A cornerstone of a gold retirement plan is the recognition that everyone's economic & life situation is unique. Personalized service is essential. Let the experts at Regal give you one less thing to worry about, so you can have the retirement you deserve

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